Our View: Wind power subsidies: It all depends on spin

Wednesday

Sep 5, 2012 at 12:01 AM

Tax credits for wind power, which are set to expire soon following 10 years of government support for the industry, mark a difference between the two presidential campaigns, but there seems to be room for at least a little of what both are looking for.

Tax credits for wind power, which are set to expire soon following 10 years of government support for the industry, mark a difference between the two presidential campaigns, but there seems to be room for at least a little of what both are looking for.

The tax credit works by giving wind farm owners 2.2 cents for every kilowatt-hour of power they produce. It is expected to cost the federal government about $1.3 billion this fiscal year, according to the Fort Worth Star-Telegram, a fraction of the credits that will be taken advantage of by the oil industry this year.

Romney argues the tax credit for wind gives an unfair advantage, and that the industry should have to compete on a "level playing field" with other energy industries.

This, of course, is nonsense.

Even the two Bush presidents, with their longstanding support of oil industries, were solidly behind promotion of credits for emerging energy technologies. The playing field has belonged to the industries that trade in carbon-based energy for so long that the impact of infrastructure on production costs and bottom lines is of a vastly different order than that for emerging technologies. Maybe when the lobbyists for the renewable sources have the access to legislators and influence currently enjoyed by the carbon-focused industries it will be an indication that the playing field is starting to level out.

Obama argues for extension of the tax credit, but for how long?

The International Energy Agency, of which the U.S. is a member, sees onshore wind in the Eurozone becoming competitive by 2020, and a Bloomberg energy report sees "grid parity" — the point at which the cost to produce energy equals the price on the grid — as soon as 2016. In other words, progress toward the competitiveness Romney seeks is moving apace, and the credits may well be unnecessary before too long.

But offshore wind is still a way off from that competitive viability, and without credits or other similar incentives, development will be stalled, and the alternative of burning more fossil fuels will bring greater threats to American health, put more carbon dioxide and other pollutants into the atmosphere, and contribute to the increase in the frequency of weather-related catastrophes.

Finding and exploiting today's energy sources, generating and delivering power, and cleaning up after their discovery, acquisition, conversion, delivery and consumption are all extremely expensive. Tax credits for energy companies are an acknowledgement of this cost. And tax credits for emerging alternatives are not only necessary for their march to competitiveness. They push research and development in the direction of keeping more of the inhabitants of Earth healthy and alive longer.

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